Downloaded from: justpaste.it/60rbg
After sinking billions, Walmart, Amazon haven't learnt
their place in India
India is effectively muzzling the two leading US players. and it's tilting the balance in favor of offline
commerce, away from digital startups that are India's best bet for rebuilding the economy.
The list of what e-commerce platforms aren’t allowed to do in India has been growing for some time, but the latest
prohibition on flash sales has simply gone too far. If the rules get implemented, the entire business model of
Amazon.com Inc. and Walmart Inc. could come unstuck before their investments in a market of 1.4 billion people
can grow to a rewarding size.
While a lofty public purpose can always be tacked on as an afterthought to the most draconian of regulations, in
this case, the fig leaf is thinner than usual. It’s hard to see how “significantly reduced prices, high discounts or any
other such promotions or attractive offers” for a period of time “limit customer choice, increase prices and prevent a
level playing field.”
The real driving spirit behind the consumer affairs ministry’s new draft guidelines, currently open for public
comment, may lie elsewhere. In the garb of checking manipulative behavior by online marketplaces, India is
effectively muzzling the two leading U.S. players. It’s also tilting the balance in favor of offline commerce, and away
from digital startups that are India’s best bet for rebuilding the pandemic-ravaged economy.
Amazon and Walmart are dominant but in a tiny corner. Overall e-commerce is only 4% of India’s $800 billion retail
markets. Yet they’re supposedly exerting such a baleful influence on the natural flow of goods that they must be
reined in by, in effect, instructing Amazon not to sell its Made in India Fire TV Sticks — a media streaming device
— on its local e-commerce website. Ditto for Walmart. Its physical wholesale operation in the country may not be
able to hawk a shirt on Flipkart, the online marketplace it acquired for $16 billion in 2018. And this is wh